by Michael Tarsala
Facebook’s IPO is now in sight, with the company taking the preliminary step of planning to halt secondary market trading by the beginning of April.
The deal is set to go down in May, according to the latest from the Wall Street Journal. That’s despite reports of slowing ad sales, a fresh warning about the company’s patent dispute with Yahoo, and Wall Street in a tizzy over a Zuckerberg slight.
Facebook’s implied valuation on Sharespost.com is now $101 billion. That’s 27 times its 2011 sales of $3.71 billion. As Mulk Hulbert reported, that’s three times Google’s price-to-sales multiple when it went public.
So is Facebook a sucker’s bet or the great hope for the next generation of investors?
Hey, I can’t start taking sides all of a sudden. But I will offer up the following:
- Here are five things to think about as you weigh whether an investment in Facebook is worth the risk, including a look at the performance of past offerings. There does not appear to be a quantifiable edge in buying big IPOs.
- Be careful. There could be Facebook IPO scams out there, and potentially high lock-up fees. If you plan on buying, it’s not a bad idea to consult a registered investment adviser, as well as an attorney.
- Brian Bolan, strategist at Zacks Investment Research, offers his thoughts below in an exclusive interview. He ultimately thinks the company is a long-term investment at the right price, although viewing Facebook’s multiples in isolation is a bad idea.
